Court: NWA attendants can’t strike

03/30/2007

Ruling upholds airline's forced pay cuts; union considers options


BY SHERYL JEAN
Pioneer Press
Article Last Updated: 03/29/2007 10:55:41 PM CDT


Northwest Airlines flight attendants gathered in Bloomington in August after a federal judge refused to block random strikes by their union, a strategy dubbed "Chaos." On Thursday, the attendants lost an appeal for the right to strike Northwest over pay, benefits and other cuts.

The Court of Appeals for the Second Circuit in New York on Thursday denied an appeal by the union for Northwest Airlines' flight attendants for the right to strike the carrier, setting a legal precedent for cases pitting bankruptcy law against labor law.

About 8,000 Northwest flight attendants sought the right to strike after the airline won court permission to impose steep pay, benefits and other cuts in bankruptcy reorganization. The flight attendants were the carrier's only labor group that failed to ratify a negotiated deal.

"This dispute between the Association of Flight Attendants and Northwest Airlines is situated in a peculiar corner of our law," the judges wrote in a 51-page opinion. "Although this is a complicated case, one feature is simple enough to describe: Northwest's flight attendants have proven intransigent in the face of Northwest's manifest need to reorganize."

Eagan-based Northwest on Thursday said it was pleased with the ruling, which upheld an earlier U.S. District Court decision. Northwest spokesman Dean Breest said the airline's main goal is to reach a consensual agreement with its flight attendants. The last contract talks took place in mid-December.

AFA attorney Edward Gilmartin said the union was reviewing the ruling and its legal options, which include seeking reconsideration by the same three-judge appeal panel, asking the entire appeals court to review the case or taking it to the U.S. Supreme Court.

In the meantime, the union has ramped up its pursuit of the right to strike via another route. Union officials recently lobbied in Washington, D.C., for support of its repeated requests to the National Mediation Board to declare talks at an impasse and release the union and Northwest into a 30-day cooling period before a possible strike.

This legal marathon began last summer, after the AFA threatened to strike Northwest in protest of imposed terms on July 31. Flight attendants saw their wages and benefits cut up to 40 percent - from about $42,000 a year to about $25,000. Other Northwest union groups took pay cuts under negotiated contracts, but the flight attendants voted down two tentative agreements.

In August, a bankruptcy court judge allowed flight attendants to strike because Northwest took "unilateral action" in rejecting their collective bargaining agreement to impose terms. Northwest appealed to the U.S. District Court in New York. U.S. District Court Judge Victor Marrero ruled in Northwest's favor, blocking any strike action by flight attendants.

The AFA appealed Marrero's decision. But the Appeals Court Thursday agreed that a strike would "cause irreparable harm" to Northwest.

The Appeals Court concluded that Northwest's actions were not unilateral as the AFA claimed and that the airline risked "dissolution" if it didn't impose terms. By not doing so in bankruptcy, Northwest could have violated its fiduciary duty to creditors and the estate, according to the opinion. The court also said a strike would violate the union's obligation to "exert every reasonable effort" to reach an agreement.

The AFA argued that the federal Railway Labor Act gave it the right to strike because Northwest breached its labor contract when it imposed terms. The act covers labor relations at the nation's airlines.

"They say we haven't engaged in enough effort," Gilmartin said. "Where they concluded that we haven't done enough or we should have done more is confusing to us."

One labor-relations expert said the ruling gives companies too much power. "It reinforces the imbalance in the law where Northwest was able to essentially evade it obligations by going to bankruptcy court and yet the judicial system is not granting the union the same opportunities," said John Budd, a labor-relations expert at the University of Minnesota.

Most bankruptcy experts, meanwhile, agree that the ruling sets a legal precedent that may influence other courts. Darryl Laddin, head of the bankruptcy law practice at Arnall Golden Gregory in Atlanta, said that the ruling would make the courts in the second circuit a magnet for bankruptcy filings.